Proton expects to name foreign partner in April

Proton says it is aiming to announce its foreign strategic partner in April, though there is a possibility that this could stretch to the end of June, Bernama reports. It had initially been reported last year that an announcement would be made by the end of March.

Proton CEO Datuk Ahmad Fuaad Kenali said the national automaker is expecting to receive a complete proposal from the interested parties from February and will make an announcement once the final partner has been selected.

“It is a complex transaction for a complex industry and this will surely take time,” he said. Following the proposals, the automaker will still have to do a lot of clarification and evaluation, he added.

“There could be further negotiations prior to the conclusion, but hopefully a signing can be done before the end of the first half of the year,” he said, adding that the deal involved Proton as a group and will be inclusive of Lotus Group, its wholly-owned unit.

Anthony Lim believes that nothing is better than a good smoke and a car with character, with good handling aspects being top of the prize heap. Having spent more than a decade and a half with an English tabloid daily never being able to grasp the meaning of brevity or being succinct, he wags his tail furiously at the idea of waffling - in greater detail - about cars and all their intrinsic peculiarities here.

Hopefully whichever entity that decides to partner with proton; first order of business, to increase utilization of the tanjung Malim plant, right size proton’s upper level management to reduce Overhead costs, overhaul proton’s product offering to include hybrid and electric vehicles and work towards increasing regional export numbers. Bottom line, with this partnership, hopefully proton could lose most of its legacy shortcomings and finally start working towards becoming a quality automobile manufacturer…..hope for the best….as all tax paying Malaysian are vested in proton’s turnaround success..

Renault would be the most ideal foreign partner out there. Carlos Ghosn could become the chairman of Proton, restructure the current management and turnaround the current jaguh kampung to become a real global player.

I have faith and confidence in the current management at Proton to make the right decisions, painful or otherwise.

But if I had a say in the process, my first choice would be Suzuki (provided that they’re among the 3 finalists).

Reasons in favour –

1. Proton already has standing partnership with Suzuki – This partnership also extends to Suzuki’s Indonesian partner. Proton has also made mention of a Suzuki-based SUV and A-hatchback in the future. So why stop now when the relationship has already come this far ?

2. Suzuki formally withdrew from Malaysia in Jan 2016 – Suzuki has also discontinued CKD assembly of their Swift at DRB-HICOM’s HA/Pekan plant. Suzuki’s aftersales branch has also merged into Proton Edar’s network. Suzuki is now fully depending on Proton for their sales in Malaysia. So far, the Ertiga has been selling modestly, more or less in-line with Proton’s sales target.

3. Both companies make similar products – Most of Suzuki’s best-selling models are small budget cars like the Alto/Celerio and Swift.

4. Suzuki has good R&D capability – Suzuki might not look it, but they can still design their own engines and platforms independently. Their latest engines meet Euro 6 emissions standards and their latest Ignis model recently scored 5-stars in its EuroNCAP test. Suzuki also has a plant in Europe (in Hungary). And it goes without saying that Suzuki’s cars are also very reliable, and fuel efficient.

5. Suzuki’s Indian success story – India is a major market for Suzuki, in which they have a long-standing partnership with India-based Maruti (Maruti is pretty much India’s Perodua). Suzuki controls almost 50% of the Indian market through Maruti. Some Indian-made Suzukis are also exported worldwide, including to Japan itself (and Europe). Suzuki has 101% confidence in their Indian partner. Perhaps Proton and Suzuki could establish a similar relationship for the ASEAN market. It will no doubt take decades, but if both parties are willing to work together, it is very much feasible.

6. Suzuki could help Proton enter the Indian market – Proton has been trying to enter India since the 1990s, but they couldn’t find a suitable Indian partner.

At the moment, I don’t think there is a suitable model in Proton’s line-up which could sell well in the Indian market, without overlapping Maruti Suzuki’s line-up. The Saga is the most ideal of the lot, but it’s too long to qualify under India’s sub- 4 metre sedan regulations. (The Saga is 4.3 metres) However, if Proton launched the Saga in India (as a Suzuki Saga ?), it would compete with the Honda Amaze, Tata Zest, Ford Figo, VW Ameo and Hyundai Xcent. It would also undermine the Suzuki Swift Dzire. The Iriz and Persona may also be good choices, but they will undermine some Suzuki models and be too expensive compared to the competition. Proton could however use their safety USP in India, where many budget cars don’t even have airbags or ABS, let alone ESC.

Reasons not to be in favour –

1. According to some news speculators, the whole Proton-Suzuki pact only happened thanks to Dr.M; he is a close friend of Suzuki’s chairman, Osamu Suzuki. Unfortunately, Dr.M stepped down from his position as Proton’s chairman in early-2016. The relationship between Proton and Suzuki has degraded since then, but Suzuki has never confirmed or denied this speculation.

It’s not entirely unreasonable to say that Suzuki has much less reason to invest in Proton now that Dr.M is no longer its chairman. Once again, we can all thank our supreme leader for successfully pressuring Dr.M to step down from Proton. Yay.

2. Suzuki is not strong in China or the U.S. – Unfortunately, Suzuki’s market share in China is miserable for a Japan-badged company. Suzuki left the U.S. market in 2012 after years of slowing sales. This is not to say that Suzuki’s products are bad, but likely because Suzuki has not invested in ‘made for China’ cars like Toyota and Honda have done. And Americans like big cars and big SUVs, not small hatchbacks and small SUVs (which Suzuki specialises in). Suzuki doesn’t have a pickup truck either. They once sold a rebadged Nissan pickup truck, but only for a few years.

3. Suzuki hybrid/PHEV/EV technology is not widespread – Unlike Renault/Nissan/Mitsubishi/Peugeot, which have several alternative energy models, Suzuki offers a quite limited range mainly in their home market. Meanwhile, Nissan has the best-selling LEAF, Renault has the ZOE, and Mitsubishi has the new Outlander PHEV, but Suzuki has nothing comparable.

This comment is already way too long so I will stop here. I could share a lot more ‘yay and nay’ points about the other speculated companies, but I’m really hoping Suzuki will be the one Proton chooses. If not, Renault/Nissan/Mitsubishi would also be a good, very close second choice. But Peugeot and Geely are way far off… only worth considering as last ditch options.

Wonder why is Proton calling the shots and not MITI headed by Idris Jala.
It is how the new shareholder can path the road map for the future of Proton & not what Proton wants. Current management should be shown the door and replaced by the people the new management & stake holder wants.
A total revamp of its business module is needed and not just continuing the same modus operandi.
Perhaps ramping up production should not be the way forward. What the new stakeholders should consider is to downsize the massive workforce & deciding on the models they plan to continue or abandon b4 taking the next step.
Good luck Proton hope the new stakeholder will add value & growth to the local automotive industry.

It’s bizarre that any auto company would want an equity stake in Proton, and in doing so, they would need to deal with & face all the legacy issues & challenges ! All they would get is an optimal stab at market share, because of lower excise duties etc, like Proton currently enjoys. Malaysia is a comparitavily small auto market. Won’t it be a better viable option to assemble cars in Malaysia ?
-Suzuki: Good basic cars, but limited array of segments
-Renault-Nissan: Nissan already have an assembly plant in Malaysia. Would the Protons then be re badged ? Or maybe, Nissan would reintroduce the Datsun brand ?
-Volkswagen: Can’t see this happening, there would be too many stipulations by the Germans to safe guard their brand reputation.
-TATA: A possibility, as they need to grow out of India, and DRB HICOM have the local agency. This would also give Proton engineers room to grow and show case their inventions. Proton cars would also have the opportunity to keep & develop their local DNA, as an
indeginous kereta would attract many buyers. TATA are also improving leaps & bounds because they have owned JLR since 2010, and they understand multi branding and how to keep brands individual.

You can either post as a guest or have an option to register. Among the advantages of registering is once a name has been registered, a guest cannot post using that name. If you have an account, please login before commenting. If you wish to have a profile photo next to your name, register at Gravatar using the same e-mail address you use to comment.